native american resources committee newsletter - american bar

1Native American Resources Committee, July 2013

July 2013Vol. 9, No. 2

Native American ResourcesCommittee Newsletter

MESSAGE FROM THE COMMITTEE CHAIRRobert F. Gruenig

We hope that you enjoy this latest issue of the NativeAmerican Resources Committee Newsletter, whichincludes timely articles on several issues relating toenvironmental, energy, and resource issues in Indiancountry. Since the 1980s, the Native AmericanResources Committee has been recognized as anational forum for lawyers representing federallyrecognized tribes, tribal entities, indigenous peoples,and businesses engaged in development or othercommercial activities within or near Indian country,Alaska Native villages, and other lands of indigenouspeoples (collectively, Tribal Lands). The committeefocuses on broad-ranging current and emergingenvironmental, energy, and resource issues affectingTribal Lands, including but not limited to regulation ofreservation activities, resources, and the environment;traditional, renewable, and alternative energydevelopment; land use, land rights, leasing, andpermitting; climate change impacts and legislativeinitiatives and policies; financing and economicconsiderations; collaborative efforts between tribes andstates or developers; treaty and subsistence rights;Indian water rights; environmental justice; cultural andsacred site protection; and cross boundary andinternational initiatives, agreements, and processesaffecting the rights of tribes and indigenous peoples.

Although our committee focus is broad and ambitious,we look forward to addressing these issues with youand the rest of our membership through the

committee’s written materials and programs. You areinvited to participate by contributing to the committee’snewsletter, the Year in Review, and the variousprograms that the committee sponsors throughout theyear. If you are interested in contributing in any ofthese areas, please let the appropriate vice chairsknow of your interest.

We are pleased to introduce the vice chairs who havevolunteered to spearhead the committee’s activitiesduring this 2012–2013 ABA year. They are:

Committee NewsletterRonnie Hawks, Esq., [email protected] W. Gardner, Esq., [email protected],

Membership and Law Student OutreachBidtah Becker, Esq., [email protected]

The Year in ReviewWilliam Norman, Esq., [email protected]

ProgramsDean Suagee, Esq., [email protected] Pensley, Esq., [email protected]

Electronic CommunicationsBrandy K. M. Toelupe, Esq.,[email protected]

Social MediaYonne Tiger, Esq., [email protected]

2 Native American Resources Committee, July 2013

Native American ResourcesCommittee NewsletterVol. 9, No. 2, July 2013Ronnie Hawks and Jane W. Gardner, Editors

In this issue:

Message from the Committee ChairRobert F. Gruenig...................................... 1

A Message from the EditorsRonnie Hawks andJane W. Gardner ..................................... 3

Renewable Energy on Tribal Lands: KeyAgreements and Terms for SuccessfulProject DevelopmentDouglas C. MacCourt .............................. 3

Governance and JurisdictionalConsiderations for Renewable EnergyDevelopment in Indian CountryPilar M. Thomas ........................................13

California District Court Upholds the BLM’sOcotillo Wind Farm Approval AmidstEnvironmental ChallengesJanis Bladine ...........................................18

Free Prior Informed Consent: Limitations andSuccesses in Enabling Native Direction ofNative Land DevelopmentSamantha Arens .....................................20

The Supreme Court Denies Review ofKivalina Global Warming Damages ClaimRonnie P. Hawks ......................................23

Copyright © 2013. American Bar Association. Allrights reserved. No part of this publication may bereproduced, stored in a retrieval system, ortransmitted in any form or by any means, electronic,mechanical, photocopying, recording, or otherwise,without the prior written permission of the publisher.Send requests to Manager,Copyrights and Licensing, at the ABA, by way ofwww.americanbar.org/reprint.

Any opinions expressed are those of the contributorsand shall not be construed to represent the policiesof the American Bar Association or the Section ofEnvironment, Energy, and Resources.

August 1-2, 201325th Annual Texas EnvironmentalSuperconferenceAustin, TXPrimary Sponsor: State Bar of Texas,Environmental and Natural Resources LawSection

August 8-13, 2013ABA Annual MeetingSt. RegisSan Francisco, CA

October 9-12, 201321st Fall ConferenceHilton BaltimoreBaltimore, MD March 20-22, 201443rd Spring ConferenceThe Grand America HotelSalt Lake City, UT

June 4-6, 201432nd Annual Water Law ConferenceThe Red Rock Resort, Casino and SpaLas Vegas, NV

October 8-11, 201422nd Fall ConferenceThe Trump Doral Golf Resort & SpaMiami, FL

CALENDAR OF SECTION EVENTS

AMERICAN BAR ASSOCIATION

SECTION OF ENVIRONMENT,ENERGY, AND RESOURCES

For full details, please visit www.ambar.org/EnvironCalendar


A MESSAGE FROM THE EDITORSRonnie Hawks and Jane W. Gardner

Please enjoy the latest issue of the Native AmericanResources Committee Newsletter. It has been ourprivilege to work with our committee on developing thenewsletter, and I’m sure you will find it topical andinteresting. We urge you to think about the importantissues that are raised here, and provide us with yourthoughts and comments on the articles. The NativeAmerican Resources Committee requests that youprovide us with your thoughts not just on this topic, buton future topics you would like to see in upcomingnewsletters.

Our deepest gratitude to the members of thecommittee and, in particular, Robert Gruenig and DonClary, for their assistance in this effort.

RENEWABLE ENERGY ON TRIBAL LANDS: KEYAGREEMENTS AND TERMS FOR SUCCESSFULPROJECT DEVELOPMENTDouglas C. MacCourtAter Wynne LLPPortland, Oregon

This paper was originally submitted for the 19thSection Fall Meeting in Indianapolis, Indiana,October 12–15, 2011.

Abstract

Indian tribes and Alaska Natives in the UnitedStates (hereafter, “tribes”) are well positioned totake advantage of renewable energy developmentopportunities as a result of the vast amount of landand energy resources controlled by tribes. Tribes areactively exploring new business models to own andinvest in energy assets, and to develop and producepower, either for consumption by their own peopleor for economic development purposes as acommodity for sale to utilities and industry in thewholesale power market. There are a number ofreasons why a tribe might decide to partner with anontribal business entity for development of anenergy project, including energy projectdevelopment expertise; access to project financing;and the benefit of federal incentives (e.g., taxcredits). This paper explores some of the keyenergy-related agreements needed for utility-scaleand community-scale projects for successfulrenewable energy development.

Developing the Project—Key EnergyProject Agreements

Any party involved in the development of a renewableenergy project will at some point find itself entering intoa variety of legal agreements, ranging from relativelysimple agreements for the purchase of technicalservices to complex long-term financing or ownershipagreements.

It is beyond the scope of this paper to provide detailedinformation about every contract that might be required

Leadership DevelopmentProgramApplications Now AcceptedDeadline August 12, 2013

The LDP is designed to support Section members interested inexpanding a current leadership role or growing theirknowledge of the Section so that they can assume a leadershiprole in the future. The Section is seeking to identify and enroll upto twelve Section members who exhibit an interest in increasedSection involvement or leadership responsibility and who cancommit to the Leadership Development Program over one year(September 2013- August 2014). We anticipate that theseindividuals will reflect diversity and help the Section support ABAGoal III.

http://www.americanbar.org/groups/environment_energy_resources/membership/

ldp.html


in the course of developing a renewable energyproject. The following discussion provides an overviewof four types of agreements that are central anduniversal to almost every energy project, as well asinsights and tips for tribal managers involved in contractnegotiations.

Joint Venture/Joint DevelopmentAgreementsJoint development in the context of a renewable energyproject on tribal lands describes a contractual,collaborative enterprise between a tribal sponsor andoften a nontribal entity—usually a developer orinvestor—to form a project entity and carry outdevelopment together.1 This type of project entity isoften referred to as a “joint venture.” There are anumber of reasons why a tribe might decide to partnerwith a nontribal business entity for development of anenergy project. In the energy context, tribes aremotivated to partner for three primary reasons: (1) toacquire energy project development expertise that thetribal project would otherwise lack; (2) to secureproject financing; and (3) to get the benefit of federalincentives (e.g., tax credits).

Once a tribe has identified a potential partner/investorfor an energy project, the parties will need to create asafe process for negotiations. The first step innegotiations is often a nonbinding letter of intentcoupled with a confidentiality and nondisclosureagreement. Together, these agreements set the basictone for discussions between the tribal sponsor and thedeveloper or potential partner and allow both partiesto share information without fear of disclosure tocompetitors. At this early stage most nontribal partieswill accept dispute resolution pursuant to tribal law.This creates an opportunity for the tribe to demonstrateits capacity to support the project.

One of the first topics to be discussed is what type ofentity the parties should form to undertake jointdevelopment of the project. The tribal sponsor mustalso consider what type of tribal entity will be the partyto the joint development agreement. As discussionsbetween the parties proceed, the next key step isdrafting a joint development agreement that clarifiesand memorializes the intent of the parties. The

agreement should be comprehensive in scope, detailingvirtually all aspects of the joint development. A jointdevelopment agreement is a detailed agreementbetween the joint venture partners that establishes thebasic framework of the relationship by detailing thepreconstruction project development process andallocating rights, duties, and obligations between thetwo entities. The joint development agreement also setsthe tone and “template” for all future agreementsbetween the tribal sponsor and the nontribal businesspartner. The following discussion omits very necessarybut basic terms, focusing instead on some of the keyterms and considerations for a joint developmentagreement for an energy project between a tribe ortribal enterprise and a nontribal entity:

Development Responsibilities of the Limited LiabilityCompany (LLC): On the assumption that the LLC isan experienced developer of projects similar to theProject, it is likely that the LLC will have the primaryresponsibility for the overall development of theProject. Accordingly, the LLC will be designated asthe Party to perform or cause to be performed allactivities with respect to development of the Projectnot specifically assigned to the Tribe.

Development Responsibilities of the Tribe: Thedevelopment activities of the Tribe are usually focusedon the relationship with the Tribe and the surroundingcommunity. If there are resource agreements to beentered into with the Tribe, such as lease or easementagreements for the land, water or fuel supplyagreements, tax arrangements, and/or agreements togive priority to tribal members or businesses for thelabor or other business needs of the Project, it is likelythat the Tribe would be instrumental in making sucharrangements.

Coordination of Development Activities: Each Partyshould agree to coordinate and cooperate with theother on all Project matters in good faith in order tofacilitate the development of the Project in an effectiveand cost-efficient manner. In furtherance of thisobligation, each Party should be required to assignpersonnel that have the time and skills to devote to theParty’s assigned responsibilities and to assign arepresentative who will be the principal interface with


the other Party with respect to the Project. The Partieswill report to the other, in a form and on timing to beagreed by the Parties on the activities undertaken byeach Party in the development of the Project.

Development Costs: The agreement of the Parties withrespect to development costs (“Development Costs”)will need to be addressed. If the Tribe expended fundsin development of the Project prior to the execution ofthe Joint Development Agreement, it might seekreimbursement of these funds from the LLC uponexecution of the Joint Development Agreement or theright to be reimbursed at the closing of the financing forthe construction of the Project (“Financial Closing”).The responsibility of each Party for funding newDevelopment Costs will need to be addressed,including the internal costs for personnel and overheadof each Party during development, as well as forpayments to third parties, such as to consultants andadvisors and for filing fees for permits, etc. It isimportant for the Parties to agree in advance on abudget for the Development Costs (“DevelopmentBudget”), on a mechanism for revisions to theDevelopment Budget, and for milestones or othercircumstances that must be met for continued funding,in order to avoid surprises and disagreements betweenthe Parties. The Parties also may agree upon fees to beearned by a Party during Project development todefray its internal costs, and/or success fees to whichone or the other or both will be entitled at FinancialClosing in order to reward a Party for the financial riskthat it has undertaken during the development of theProject.

Ownership of Project Assets and Work Product:Ownership of data, information, studies, analyses, andreports developed by either Party in the performanceof the Project development (“Work Product”) and ofany Project permits obtained during development willneed to be addressed. If the Work Product andpermits are obtained by one Party, it should be statedthat such Work Product or permit will be the propertyof the Project Company upon its formation or at aspecified time and, until then, will be held by anindividual Party in trust for the Project Company. TheParties should agree to share Work Product but shouldalso determine whether there is Work Product for

which disclosure to third parties (other than Projectconsultants) should be restricted. If the Tribe has theequivalent of a “freedom of information act” or otherregulations that would treat any information held by atribal entity as public information, the Parties will needto determine mechanisms under which they will seekprotection for the confidentiality of nonpublic orproprietary information.

Affiliate Contracts: The arrangements for contractsbetween either of the Parties or their affiliates, on theone hand, and the Project Company, on the otherhand, should be described, e.g., by including arequirement that the terms and conditions benegotiated on an arm’s-length basis and be reflective ofmarket conditions and/or by having the affiliated Partystep out of the negotiations. Such affiliate contracts,employing tribal members or tribal businessenterprises, are often a key objective of tribal sponsorsin the deal.

Compliance with Law: The Parties should agree toadhere to all laws, including tribal laws, applicable tothe Parties or the Project during the development ofthe Project.

Governing Law: Governing law is likely to be acontroversial issue for the Parties to resolve. The Tribewill likely desire that the Joint Development Agreementbe governed by its tribal laws, while a private entitysuch as an LLC will prefer the laws of a jurisdictionwith which it has familiarity and for which there can bepredictability through the LLC’s understanding of thejurisdiction’s laws and precedents. If the laws of theTribe are highly developed and the determinations of itscourts are readily accessible by nontribal members, theTribe will have greater success at arguing for the triballaws to govern the contract. However, it would not besurprising for an LLC to desire that the agreement begoverned by the laws of a state with a well-developedbody of commercial law, such as the laws of the Stateof New York, which is often specified for complex andcostly commercial ventures. (See section 5-1401 of theNew York General Obligations Law, which providesfor such choice of law.) Bear in mind that although theJoint Development Agreement may set a precedent forthe Parties’ negotiation of other arrangements, it is


feasible for the Joint Development Agreement and jointownership agreement to have a different governing lawthan the arrangements that involve the use of tribalresources such as land, fuel, or water.

Dispute Resolution: A mechanism for resolving disputesand claims under the Joint Development Agreementshould be specified. While the efficacy of arbitration isa heavily debated topic, it might be a useful middleground for the Parties as opposed to trying to reachagreement on whether the tribal courts or state orfederal courts will be used for dispute resolution.

Waiver of Sovereign Immunity: The LLC is likely torequest that the Tribe waive its sovereign immunity inlight of the commercial nature of the Joint DevelopmentAgreement and related joint ownership agreement, atleast insofar as such waiver is necessary to preserve aParty’s rights to pursue the agreed-upon disputeresolution mechanism. Many tribes grant limitedwaivers that protect certain tribal assets and imposeother conditions on the scope of the waiver in order tosecure contracts. Legal counsel should be consulted onthe precise text, and tribal law may require specificprocedures or approval by tribal council for the waiveror limited waiver to be valid.

Power Sales AgreementsOnce an energy developer has identified one or morepotential customers and is ready to secure a long-termcommitment from a power purchaser, it will begin tonegotiate a power sales agreement or PSA. As thename implies, a PSA sets the terms and conditions forthe sale of power from the project.2 A well-craftedPSA is a pivotal element of a successful energyproject. With some exceptions, the basic terms andconditions are the same no matter whether the PSAdeals with the output of a renewable energy project, beit solar PV, thermal, hydro, biomass, wind, or othertype of fuel resource and technology.

In order to understand and negotiate a PSA, it isnecessary to understand certain basics about howelectrical energy is purchased and sold. Electricalpower is sold by two components: capacity andenergy. Capacity is expressed in MW (megawatts).Capacity is of two types. The manufacturer’s rating ofthe generating equipment’s capability is the “nameplate

capacity” of the equipment. In a project with more thanone generator, such as a wind project, the project’snameplate capacity is the sum of all the units in theproject. The other type of capacity is the MWs that theproject is most likely to make available in day-to-dayoperation. It is the net amount of the nameplatecapacity reduced by the project’s capacity factor andavailability factor. This latter is the capacity level thatwill be used for the energy production commitmentsthat will be made in the PSA. The capacity pricegenerally is designed to recover the fixed and capitalcosts of the project over a 20- to 30-year period muchlike a mortgage payment. Energy is the power,measured in MWh (megawatt hours) or kWh (kilowatthours), actually delivered from the project. Anotherway to look at the price of the energy component isthat it is set to recover the variable costs of producingthe power delivered during a month.

The project’s customers may have the choice ofpurchasing firm or interruptible energy and capacity.Firm energy is priced higher and is often associatedwith rights to project capacity. Interruptible energy canbe relatively inexpensive and usually is not associatedwith any rights to capacity. Customers with firmcapacity rights have the first call on project output.Firm capacity and energy are often subject to a “takeor pay” provision in the pricing section of the PSA,which requires the customer to pay whether or not theyactually take any power. Obviously the project has tobe up and running and making power availableaccording to the requirements of the PSA in order forthe take-or-pay provision to be enforceable.

The following are most of the key provisions in a PSA:

Buyer promises to purchase. The core of the PSAis the purchaser’s commitment to purchase powerproduced at a certain price.

Developer promises to deliver power. The projector seller’s core commitment is to deliver a certainamount of power (MWh delivery expectations) tospecified delivery points—these generally will bethe connection points with the transmissionprovider or at a meter or transformer in the projectsubstation or switchyard.


The Commercial Operation Date (COD). This isthe date on which the project will be put intoregular service and fully subject to all of its deliveryobligations in the PSA.

Terms of payment. The parties must agree howand when the purchaser will make payments andwhether “green attributes” are included in thepurchase price or priced and sold separately.Parties to a PSA will often include a mechanism forchanging the price over the term of the agreement.This may be indexed to an agreed inflationmeasure, such as one published by the U.S.Department of Commerce, or the cost of keyinputs such as fuel or a set amount at agreedintervals over the life of the PSA.

Term of agreement. The parties must agree to aspecific term for the initial length of the agreement(usually at least 20 years, but at least as long as theproject financing loans). The PSA should alsoprovide for a certain number of renewals forshorter periods (usually no more than five years).

Conditions precedent to the parties’responsibilities. In many cases project developerswill secure a PSA for the power output from aproject long before the project is completed. It isnot unusual for parties to enter into a PSA beforeproject construction has commenced because aproject developer may need to have a signed PSAbefore it can secure financing. Many lenders andinvestors want to see proof that a project will havea fixed revenue stream upon completion beforeinvesting in it. Because of this “cart before thehorse” situation, both parties need detailedprovisions that protect them in the event that theproject fails, falls behind its construction schedule,or does not perform according to expectations.These provisions set “conditions precedent to theparties’ responsibilities.” In other words, the buyerwill only be required to satisfy its obligation to buypower if the developer successfully performs itsrequired tasks to produce and deliver it. Thosetasks also include deadlines that must be met totrigger an obligation or right under the PSA.

Among them are closing project financing; applyingfor and obtaining necessary permits and approvals;meeting construction milestones; successfulequipment testing; and commissioning andcompletion of ancillary agreements.

Construction and project in-service deadlines. Ifthe project gets significantly behind schedule, it canhave serious consequences beyond anyinconvenience that results. In the case of a windproject, the right to receive production tax credits(PTC) will usually depend on the project’s being incommercial service by a date set in the federallegislation authorizing the PTCs.

Government approvals required and which party isresponsible for securing them (such as land use,construction, environmental). Governmentapprovals are usually the responsibility of theproject developer, with project owners andoperators having responsibility for continuingcompliance and reporting once the projectachieves its COD.

Utility regulatory approvals and filings. These maybe required for the life of the project and mayinclude state and federal regulatory proceedings.Frequently the project will be regulated at the statelevel, but could be subject to both federal and stateregulation. Interstate transmission service isregulated at the federal level. State and federaljurisdiction will vary with land ownership and tribaljurisdiction.

Supporting agreements required. The PSA mayrequire successful completion of other keyagreements, such as transmission andinterconnection agreements or plant operation andmaintenance agreements.

Responsibility for reserve power and “shaping.”The PSA should set which party arranges and paysfor reserves or backup capacity for unexpectedloss of power production from the project orreduced transmission transfer capability. A certainlevel of reserves is required in order for theproduct to be interconnected with the transmission


grid. “Shaping” adjusts project output over a giventime period—for instance, to ensure that the outputlevel is steady even if the wind is variable or stops,which usually requires a separate agreement withanother generation project that operates in a baseload manner on fossil fuel or possibly ahydroelectric project.

Project equipment. A PSA usually includes severalprovisions relating to the project equipment andhow its maintenance or failure might affect theproject’s ability to meet power deliveryexpectations. These provisions outline anyindemnity or compensation available to the powercustomer.

Defaults and remedies. This sets the hierarchy ofthings that could go wrong and what events areserious enough to give one of the parties the rightto terminate the agreement or be entitled todamages. There will be considerable negotiation onthese terms.

Transmission and InterconnectionAgreementsTransmission is key to development of a successfulenergy project. All energy projects will requiretransmission of the project’s power output to thepower purchaser(s). From a practical standpoint,agreements for transmission service are the culminationof significant efforts and analysis by the receivingcustomer or the project developer to identify a cost-effective interconnection to an existing transmissionsystem. Agreements for interconnection often includeconstruction requirements and, like in the PSA, bothparties might require certain protections in order tolimit their exposure to risks. For example, the projectdeveloper generally needs a contractual commitmentfrom the transmission provider before it beginsconstruction of the necessary interconnectionequipment. The terms and conditions for transmissionservice will often consist of two separate agreements:

Interconnection: Project and transmission providerenter into an agreement for connection of theproject to the provider’s system.

Transmission: Project or power purchaser andtransmission provider enter into an agreement forthe transport of power to the purchaser’s deliverypoint.

There is likely to be much less negotiation over theterms and conditions of the transmission agreementthan with the PSA since the service will almost certainlybe provided pursuant to state or federal tariffs orregulations that require all customers be served onroughly equal terms. The rates probably will bedetermined by the transmission provider’s tariff, whichmay provide for “market based” negotiated rates. TheFederal Energy Regulatory Commission’s regulationsrequire that all parties are treated in a similar fashionand have open access to the transmission system.Reservations of capacity and information about thetransmission system are made on the provider’sOASIS (Open Access Same Time InformationSystem) Web site. The primary issues will be whetherthere is enough available capacity to provide service,which party will fund and construct the interconnectionfacilities, and what level of credit support will berequired from the party receiving the transmissionservice. There may be a queue for service sincetransmission capacity is only added in blockincrements. The provider may require that a systemstudy be performed, at the project’s expense, todetermine if capacity is available and the conditionsunder which the project may be connected to thesystem.

The transmission agreements must be pursued early inthe development process to allow time for studies tobe performed, equipment specified, and capacityverified. It is important to note that a project might notbe able to obtain transmission service within itspreferred time constraints and that the project mighthave to construct a connecting transmission line at itsown expense in order to obtain transmission serviceeven if service is available at the connection point tothe grid.

Many of the terms of a transmission servicesagreement will be subject to regulatory requirements orthe provider’s tariff. Some of these terms may go in thetransmission services agreement and the


interconnection provisions could be merged with it orbe an exhibit to it. For purposes of this discussion, weassume that the transmission services agreement andthe transmission interconnection agreement are mergedinto one. The purpose of an interconnection agreementis to establish the requirements, terms, and conditionsfor the interconnection of the generator’s facility withthe transmission system of the transmission provider.

Key Provisions of Transmission Services/Interconnection Agreements

Transmission service. Transmission providerpromises to provide transmission service over itstransmission system.

Purchase obligation. Project developer/generatorpromises to purchase transmission services fromprovider.

Service rates. Rates for transmission service aregenerally set by provider’s tariff.

Term of agreement. The parties must agree to aspecific term for the initial length of the agreementand renewal terms. The term usually correspondsto the term of the PSA, though the rates will varyover time.

Conditions precedent to the parties’responsibilities. Completion of interconnectionfacilities is often a condition precedent to thetransmission services agreement. In aninterconnection/transmission agreement, thetransmission provider often commits to theengineering study and design work necessary forinterconnection. The project developer oftenagrees to pay for design and construction of allequipment and facilities and may, in some cases, beresponsible for construction. Interconnection andtransmission may also be contingent on theproject’s closing of certain financing or funding.

Construction and project in-service deadlines. Theagreement should specify construction deadlinesand in-service deadlines.

Ownership of interconnection facilities. Even if theproject funds the construction of the facilities, theprovider may require title to the facilities.Depending upon circumstances, the project maybe indifferent to whether it has title or not,especially if some liability or maintenance obligationcomes with ownership.

Government approvals. The agreement should notewhich government approvals are required (such asland use, construction, environmental) and whichparty is responsible for securing them. Governmentapprovals are usually the responsibility of theproject developer, with project owners andoperators having responsibility for continuingcompliance and reporting once the projectachieves its COD.

Utility regulatory approvals and filings. These maybe required for the life of the project and mayinclude state and federal regulatory proceedings.Usually the project will be regulated at the statelevel and the transmission provider at the federallevel.

Supporting agreements required. A transmissionservices agreement will often make references toother related agreements, such as a power saleagreement or a funding agreement.

Project equipment. The transmission providerusually specifies all interconnection equipment.

Agreements Relating to Development of anEnergy Project on Tribal LandsEnergy project development is inextricably intertwinedwith land. The cost-effectiveness of an energy projectdepends on the land available for a particulargenerating resource as well as the land available fortransmission. For that reason, a tribe’s assessment ofits energy resources must include a review of landownership of particular parcels to determine whattypes of leases, easements, rights-of-way, or licensesmay be necessary for development of a particularproject.


Tribes own and control land in a variety of forms.Except for Alaska Natives, the most common form istrust title, where fee title is vested in the United Stateson behalf of and for the benefit of the tribe. Tribes mayalso own land in fee title, restricted fee title, and otherforms. Trust lands, hereinafter referred to as “triballands,” are the most common. As explained below,tribal authority to “alienate” tribal land is restricted byfederal law. Because the applicable law for “leasing”differs from that governing “rights-of-way,” each topicis addressed separately.

Leasing Tribal Land for Development of anEnergy ProjectSurface leases (as opposed to mineral leases) arepopular vehicles for establishing the necessary landrights for energy projects, largely because of the longterm that can be authorized (25 to 99 years), andbecause security interests may be taken in theleasehold and in other assets that do not include theIndian land such as the wind towers or PV arrays.Tribes may use their lands for any purpose consistentwith tribal and federal law, including granting tribalmembers rights to occupy and use tribal land.3 Yeteven when the tribe leases to tribal entities ormembers,4 such a lease requires Bureau of IndianAffairs (BIA) approval if it “encumbers Indian lands fora period of 7 or more years, with limited exceptions.5

Section 81 is discussed more fully later in this chapter.Tribes may not sell, transfer, or alienate lands held intrust for them by the federal government. Even tribalauthority to lease land to non-tribal members washistorically restricted. Federal policy in favor of tribalself-determination, including tribal responsibility for themanagement of tribal resources,” has resulted in thepassage of a number of laws granting tribes specificauthority to lease tribal lands:

Section 17 Corporations. The Indian ReorganizationAct of 1934 (IRA) specifically addresses leasingauthority. Tribes that receive a “charter ofincorporation” under 25 U.S.C. § 477 (as amended in1990) of the IRA may seek authority to lease any trustor restricted lands included in the limits of thereservation for a period not to exceed 25 yearswithout BIA approval.6 Leases authorized by section

477 cannot include an option extending the 25-yearinitial term.

Section 415. Most non-agricultural surface leasing oftribal lands is conducted under the Indian Long-TermLeasing Act of 1955, also known as “section 415.”7

Under section 415, an Indian tribe may lease triballand for an initial term of up to 25 years, with an optionto renew for one additional 25-year term. Certainspecific tribes have legislative authority to lease land forup 99 years. Almost all leases pursuant to section 415are subject to the approval of the Secretary of theInterior, though two tribes have authority to lease landfor up to 75 years without Interior/BIA approval(Tulalip and Navajo).

Tribal Energy Resource Agreements (TERAs). Title Vof the Energy Policy Act of 2005 relates to “IndianTribal Energy Development and Self-Determination.”Pursuant to regulations issued on March 10, 2005,tribes can enter into an agreement with the Departmentof the Interior called a “TERA.” The TERA authorizesthe tribe to enter into leases, business agreements, andrights-of-way for energy projects on tribal land for 30years, renewable for another 30 years by the tribe, allwithout BIA review and approval.

Despite the TERA option, many leases of tribal landfor energy development will likely be subject to BIAapproval under section 415. Because of the uniquecircumstances of each energy project, tribes shouldalways work with an experienced attorney tounderstand the leasing issues specific to each parcel.The following is a list of some of the issues that tribalmanagers should be aware of:

Even a tribal entity may be subject to limitations as alessee. Any person or legal entity other than the tribeitself, “including an independent legal entity owned andoperated by the tribe, must obtain a lease under theseregulations before taking possession” of tribal land. 25C.F.R. § 162.104(d).

BIA must comply with NEPA, NHPA, and ESA. BIAmust also comply with several key environmental andcultural preservation laws before approving a lease oftribal land, including the National Environmental Policy


Act (NEPA), the National Historic Preservation Act(NHPA), and the Endangered Species Act (ESA).BIA compliance with any one of these laws can involvea lengthy process with substantial public involvementand may require mitigation of environmental or otherimpacts from the proposed project.

In some situations, a tribal resolution can trump federalregulations. The federal regulations implementingsection 415 can be superseded or modified by triballaws in certain circumstances. Specifically, BIA willstreamline and modify certain approval processeswhen specifically authorized by an appropriate tribalresolution establishing a general policy for the leasing oftribal land. The tribal resolution must comport with 25C.F.R. §162.109(b) (requiring that the tribe give BIAnotice of the resolution and that the resolution beconsistent with federal law).

BIA must approve subleases and assignments. Subjectto certain exceptions, a sublease, assignment,amendment, or encumbrance of any lease or permitissued under section 415 requires BIA approval.

Section 415 regulations address remedies for breach,dispute resolution, and when BIA has the authority tocancel leases. BIA involvement in a lease of tribal landdoes not end with BIA approval. Among other things,section 415 regulations give BIA the authority tocollect payments on behalf of the tribe as well ascancel the lease under certain circumstances. See 25C.F.R. §162.612 et seq.

Rights-of-Way and EasementsBIA grants rights-of-way across tribal land subject totribal consent and compensation. Federal law governsthe granting of rights-of-way on tribal lands fortransmission lines, hydroelectric facilities, andreservoirs.8 BIA must comply with NEPA, NHPA,ESA, and its own regulations before granting the right-of-way. Additionally, tribes might need to enter intoeasements for use of private land in order to secureinterconnection and transmission off tribal lands.

BIA Approval of Contracts with TribesIn March 2000, President Clinton signed the IndianTribal Economic Development and Contract

Encouragement Act of 20009 into law to encourageoutside investment in Indian Country. In the 2000 Act,Congress revised 25 U.S.C. §81, more commonlyknown as “section 81” and amended the long-standingrule that required BIA approval for all transactionsbetween non-Indians and Indian tribes or individualsrelating to Indian lands.

Today, section 81 requires the Secretary of the Interioror the Secretary of the Interior’s designee to approveany contract that encumbers Indian lands for a periodof seven years or more. Pursuant to 25 C.F.R §84.002, leasehold mortgages, easements, and anyother contract that gives a third party exclusive ornearly exclusive proprietary control over tribal land aregoverned by section 81. Approvals are normally madeby the regional or area BIA office responsible for theparticular tribal lands.

Special Considerations for Leases on TribalLands

The considerations for contracts discussed in thispaper are also critical for leases of tribal lands.Reaching agreement on lease issues is a critical early-stage development issue due to the importance of sitecontrol in permitting, negotiations for PPAs,transmission interconnection, and financing. While thelease does not need to be negotiated too early in theprocess, the joint venture or development agreementshould guide the tribe and nontribal parties throughgeneral goals of a project site lease to avoid surprisesduring the development process.

Know your agency: Talk with the local BIAofficials early about the approval process,timelines, federal appraisal requirements, etc.;

Permitted uses: Ancillary uses and projectsenabled by the primary project may be veryvaluable to the tribe; the tribe should carefully draftthe permitted uses in the lease to preserve valuableuses that are not essential to the success of theproject;

Compensation, alternative tax structure: Thereare many ways to structure compensation,


royalties, and tax payments within the requirementsof federal law;

Term (primary and renewal): If a nontribal entityrequires ownership for debt or tax purposes, oncethese purposes are satisfied the tribe should beable to come into significant or majority ownership,even if this requires phasing over a period of years;

Assignment and transfer: Some type of pre-approved authorization is common for thoseentities that may take a security interest (e.g.,approved encumbrances);

Removal of improvements; reserve account:Consider requiring the developer to fund a reserveaccount, which can be accomplished without tyingup liquid assets by using a letter of credit, personalguarantees, or other devices; and

Dispute resolution: Issues of sovereign immunity,choice of law, choice of forum for resolvingdisputes, and exhaustion of tribal remedies must beaddressed; the ultimate goal is to try and solve theproblem while keeping the project operating ormoving forward. Tribes and nontribal partiesgenerally work out a limited waiver of immunity,coupled with acceptable dispute resolution whichmay include binding arbitration with enforcement intribal courts (and other courts of competentjurisdiction).

Conclusion

Energy projects are long-term complicated projectsthat involve raising money, managing construction, andmanaging long-term operations. An energy projectneeds a dedicated team with expertise and authority tomake decisions. In determining the best businessstructure for a given energy project, a tribe mustdetermine which structure will best achieve its multiplegoals of securing investors and financing, maintainingcontrol and sovereign independence, and protectingthe tribe from liability.

Doug MacCourt is a partner with Ater Wynne LLP inthe Portland, Oregon, office and chair of the firm’sIndian Law Practice Group and co-chair of the

Sustainable Practices Advisory Group. His 2010publication for the National Renewable EnergyLaboratory, RENEWABLE ENERGY DEVELOPMENT IN INDIAN

COUNTRY: A HANDBOOK FOR TRIBES, has received nationalacclaim.

Endnotes

1 Parties may also enter into joint venture agreements forconstruction and/or operation of an energy project, butthis paper focuses on agreements for joint preconstructiondevelopment.

2 Power purchasers sometimes refer to this agreement asa Power Purchase Agreement or PPA, but the PSA andPPA are one and the same.

3 COHEN’S HANDBOOK OF FEDERAL INDIAN LAW at §16.01[3]

4 25 U.S.C. § 81, as amended in 2000.

5 25 U.S.C. § 177 (The Nonintercourse Act of 1834).

6 See also 25 C.F.R. § 84.004(b).

7 25 U.S.C. § 415; COHEN’S HANDBOOK at § 17.02[3].

8 25 U.S.C. §§ 323–28; 25 C.F.R. Pt. 169.

9 Indian Tribal Economic Development and ContractEncouragement Act of 2000, Pub. L. No. 106-179, 114Stat. 46–47.

www.ambar.org/EnvironFall


GOVERNANCE AND JURISDICTIONALCONSIDERATIONS FOR RENEWABLE ENERGYDEVELOPMENT IN INDIAN COUNTRYPilar M. ThomasU.S. Department of EnergyWashington, D.C.

This paper was originally submitted for the 19thSection Fall Meeting in Indianapolis, Indiana, October12–15, 2011

AbstractIndian tribes are eager, and poised, to takeadvantage of their abundant energy resources—renewable as well as fossil energy. As tribal leadersand officials assess their energy developmentopportunities, fundamental governance andjurisdictional issues pose threshold questions in theevaluation of these opportunities. Tribalgovernments have the inherent sovereign authorityto govern—through positive law, regulations, andtaxation, among other sovereign rights—where andhow this development will occur on tribal lands.Many—although, unfortunately not most—tribeshave exercised this sovereign authority by adoptingcomprehensive environmental review, land use andplanning, and tax codes. Non-Indian commercialproject developers and owners that build andoperate energy projects on Indian lands are subjectto triple sovereign authorities, but to very differentdegrees. This paper outlines some of the keyprinciples and concepts behind governance andjurisdiction over energy projects in Indian Country,and proposes some thoughts on reducing some ofthe major conflicts in the exercise of jurisdiction bythe three sovereigns.

Status of Indian Tribes

In the beginning, there were Indian Tribes.1 Pre-contact, Indian Tribes were self-governing sovereignsover the Tribes’ people, lands, territories, andresources. As preexisting sovereigns, Indian Tribes’inherent sovereign authorities are not dependent on,nor delegated from, the U.S. federal government.2

Based on long-standing, and still current, U.S.Supreme Court precedent, Indian Tribes are treatedunder federal law as “distinct, independent, politicalcommunities” and “domestic dependent nations.”3

Indian Tribes are within the United States, subject tofederal power, but retain all inherent sovereignauthorities not revoked or diminished by treaty, statute,or because of their status as dependent nations.4

The U.S. Constitution establishes the status of IndianTribes within the United States. The federalgovernment has the (sole) authority “to regulateCommerce . . . with the Indian Tribes.”5 Furthermore,the United States, through the president’s treatymaking authority,6 engaged in government-to-government relations with the Indian Tribes during theearly years of the United States.7 Indian Tribes’inherent, preexisting sovereignty is also “extra-constitutional.” That is, Indian Tribes are not subject tothe U.S. constitution.8 This status removes IndianTribes from the constitutional governance scheme ofthe federal and state governments. Indian Tribes arenot political subdivisions of either the federalgovernment or any state government.

Over the course of U.S. history, Indian Tribes werewoven into, and under, the federal power of the UnitedStates through congressional and presidential action.9

This incorporation has solidified over the years throughSupreme Court decisions—from the infamous MarshallTrilogy to Kagama and Lara.10 While Indian Tribesare subject to federal power, Indian Tribes are notsubject to state power on Indian lands;11 statelegislative, regulatory, taxation and judicial authorities,among others, do not extend to Indian Tribes or tribalmembers on Indian lands.12

Inherent sovereign authority is the foundation for IndianTribes’ right to self-governance and self-determination.As acknowledged under federal law, Indian Tribeshave the right to make their own laws and be governedby them.13 These sovereign rights to govern extend toIndian Tribes’ rights to control their land and resources,and to regulate the behavior of Indian and non-Indiansalike on tribal lands and territory.14 Despite recentSupreme Court decisions that have diminished IndianTribes’ authorities over non-Indians, both the legislativeand executive branches of the federal government have


encouraged and promoted tribal self-determination,self-governance, and the exercise of jurisdiction overIndian land and resources.15

Tribal Governance and Jurisdiction

As self-governing sovereigns, Indian Tribes are free todetermine for themselves how they will organize theirgovernments and affairs. Today, tribal governancestructures vary considerably, with some Indian Tribesstill organized and governed in their traditional andcustomary ways, and others organized much like theU.S. government. Most tribes have organizedthemselves under either the Indian Reorganization Actof 1934 (IRA) or the Oklahoma Indian Welfare Act of1936 (OIWA).16 Under these two acts, tribes have theability to adopt constitutions and charter corporationsto organize and govern themselves and manage theiraffairs. While over 200 tribes organized under theseacts, over 75 tribes voted not to adopt the IRAofficially (although many have subsequently structuredtheir governments using this model).17 Some notabletribes that have not organized under the IRA or theOIWA include the Navajo Nation and the CherokeeNation.

Tribal constitutions define the tribal governmentstructure and enumerate the governments’ powers.Tribal corporations, whether federally charted undersection 17 of the IRA, section 3 of the OIWA, ortribally chartered under inherent tribal authorities, aregenerally created to manage and operate a tribe’seconomic endeavors. Many constitutions andcorporations were adopted in the years after the IRAwas implemented, based on models provided by theBureau of Indian Affairs. Some of these originalconstitutions are still in place, while many others havebeen amended. To this day, Indian Tribes continue toapply for section 17 charters to incorporate triballyowned businesses. In any event, a tribe organizedunder the IRA or OIWA will have organic documentsthat typically include a constitution, bylaws, andpossibly a federally charted corporation.18 Other tribesmay have organized outside the IRA or OIWA, bystatute (such as the Navajo Nation), or by constitution(such as the Cherokee Nation), or other organizingdocument. Lastly, some Indian Tribes, like some of the

pueblos of New Mexico, may not have writtendocuments, but function based on tradition, culture,and religion.

Regardless of how an Indian Tribe chooses to organizeitself, an Indian Tribe has inherent authority todetermine how it will govern its people, lands,resources, and territories. Indian Tribes exercise theseauthorities in familiar ways—through acts of theirlegislative bodies, executive or administrativedepartments, and judiciaries. Indian Tribes haveadopted ordinances, statutes, and codes to regulatedevelopment of tribal lands. Many Indian Tribes haveestablished regulatory and taxation authorities tocontrol and tax economic activity on Indian lands andto regulate environmental issues. And, Indian Tribeshave established tribal court systems to adjudicatedisputes that arise over the use of or activities onIndian lands. The degree of formality in action variesby Indian Tribe, but regardless, federal law generallyrecognizes the validity and supremacy of an IndianTribe’s sovereign acts as applied to an Indian Tribe’smembers or related to an Indian Tribe’s lands andresources.19

Although an Indian Tribe’s authority, like anygovernment, is co-extensive with its jurisdiction, IndianTribes do not possess plenary authority or power.Instead, tribal government authority and jurisdictionmay be limited based on a number of factors, includinglocation, land ownership, tribal membership or Indianstatus, action to be taken, and government entity totake such action.

When non-Indians engage in activities on Indian lands,or non-Indian fee land within an Indian reservation,Indian Tribes’ authority over that non-Indian activityhas been delineated by the Supreme Court underMontana.20 Under this rule, Indian Tribes do not havejurisdiction (and thus authority) over non-Indianactivities on fee land within the exterior boundaries ofthe reservation, unless one of two exceptions apply: (1)the non-Indian activity may have a detrimental effect ona tribe’s public safety, welfare, economic integrity orability to govern itself; or (2) the non-Indian hasentered into a consensual commercial relationship.Despite the limitations of tribal jurisdiction over non-


Indians on non-Indian fee land, federal courtsacknowledge Indian Tribes’ sovereign rights to imposetaxes and regulations and authorize the use of triballands and resources.21

In addition to Indian Tribes’ inherent authorities toregulate activity on tribal lands, several federal statutesspecifically allow federal agencies to delegate certainagency authorities and jurisdictions directly to tribes.For example, the Clean Air Act (CAA) and the CleanWater Act (CWA) allow tribes to be “treated asstates” (TAS) for setting standards, permitting, andenforcement jurisdiction under those acts.22 IndianTribes with TAS status can establish their own CAAimplementation plans or CWA water quality standards,and permit activities under those acts.23 Most recently,the Energy Policy Act of 2005 created the ability fortribes to enter into tribal energy resource agreements(TERAs) with the Secretary of the Interior.24 Tribeswith approved TERAs do not have to get the approvalof the secretary for leases and rights-of-ways forenergy development projects on tribal lands. Tribesalso avoid NEPA requirements, although they musthave a substitute environmental review processcompliant with the statute’s requirements.

Potential Jurisdictional Conflicts

Because the federal government has plenary powerover, and a trust relationship with, Indian Tribes, thefederal government exercises jurisdiction over IndianTribes in two critical ways: (1) it must approve anynon-Indian use of Indian lands (agreements,mortgages, leases, and rights-of-ways); and (2) federalenvironmental laws generally apply on Indian lands. Asrelated to energy development, the Secretary of theInterior is required to approve oil, gas, and geothermalleases under the Indian Mineral Leasing Act25 or theIndian Mineral Development Act.26 Leases forrenewable energy projects, such as wind, solar, orbiomass, are typically approved under the Long-TermLeasing Act.27 And, to the extent that transmission linesor pipelines are developed with the project, then thesecretary is required to approve rights-of-ways forthose facilities.28

Federal environmental laws that are likely to beimplicated in energy development on Indian landsinclude, but are not limited to, the Clean Air Act, CleanWater Act, and the Endangered Species Act.29 If thereis federal action involved—such as providing financialassistance or approving lease agreements or rights-of-ways—then the National Environmental Policy Act andthe National Historic Preservation Act, among others,will also likely apply.30

Since 1834, when the Supreme Court held that statelaw does not apply within Indian reservations,31 stateand local governments have been trying to assertjurisdiction over Indian Country.32 States havesometimes sought to regulate various activities, such ashunting or fishing.33 But, more often, and especially inthe modern era, states have been most concerned withtaxing non-Indian economic activity in IndianCountry.34 The Court has established a very bright linerule that states cannot tax tribal members or IndianTribes for economic activities or income generated onIndian lands.35 However, the Court has established abalancing test—referred to as the Bracker balancingtest—to determine whether states have the authority totax non-Indian activities on Indian land.36 UnderBracker, state and federal courts have found stateauthority to tax non-Indian energy projects in IndianCountry, including oil and gas development and powerplants.37 This state taxation has resulted in losteconomic opportunities for tribes to impose taxesthemselves, as double taxation can have a sufficienteconomic detriment so as to render a projecteconomically unviable.

Removing Jurisdictional Conflicts

Indian Tribes have specific tools available to them tocounteract, or displace the conflicting jurisdictionalimpositions of both the federal government and stategovernments. For example, Indian Tribes can petitionthe Environmental Protection Agency for TAS status.Once gained, this status would give Indian Tribes theauthority to permit energy development projects onlands within their jurisdiction. Indian Tribes can alsoapply to the Secretary of the Interior for a TERA.Under a TERA, an Indian tribe does not needsecretarial approval for leases or rights-of-ways for


renewable energy development on a tribe’s lands.38 IfIndian Tribes were to avail themselves of thejurisdictional control these federal statutes allow for, aconsiderable amount of federal control over energydevelopment in Indian Country would recede.

Indian Tribes should also consider exercising theirinherent authorities to regulate and tax economicactivities on Indian lands before considering anddeveloping non-Indian owned projects. Doing sowould generally require that Indian Tribes adoptregulatory laws—including permitting, zoning, andenvironmental—as well as tax laws. Over that last fewyears efforts have been made to develop model tribalcodes for utility and environmental regulation.39 Ofcourse, because each Indian Tribe is different, modelcodes should be adapted to meet the Indian Tribe’sneeds. The existence of these laws will position IndianTribes to be able to assert an argument that conflictingstate laws should be preempted.40 Non-Indiandevelopers will also have notice of the tax andregulatory environment on tribal lands. Model codesalso contribute to certainty and clarity for non-Indiandevelopers and project owners.

In considering the types of regulatory and tax schemes,tribes should bear in mind the political implications ofexercising these inherent authorities. Much politicalconsternation has been raised about the low taxenvironment, relative to the surrounding state. IndianTribes can mute these objections by implementingregulatory and tax schemes consistent with state law.While this removes some of the competitive advantagean Indian Tribe may have through a lower tax andregulatory burden, this should be weighed against thegoal of minimizing state and local attempts to tax andregulate on-reservation non-Indian development.

Lastly, another way to avoid federal oversight andcontrol and state taxation is for Indian Tribes tostructure project ownership and legal contracts in sucha way as to make the project a tribally ownedproject—structuring the ownership so that the IndianTribe is at least a 51 percent owner. Majority tribalownership positions an Indian Tribe to assert that thestate lacks authority to tax or regulate the project.While it may be difficult for large-scale commercial

projects to be structured as majority tribal owned,given the current project financing tools, Indian Tribesshould work through and exhaust all their options fortrying to structure a project in this manner.

Conclusion

While Indian Tribes have inherent sovereign authorityand jurisdiction over energy development on Indianlands, the federal government exercises a great degreeof control and jurisdiction as well; and states have theauthority to tax non-Indian energy projects. Non-Indian developers could thus be subject to thejurisdiction of at least two, and likely three, sovereignsover energy development projects. Indian Tribes cantake certain steps to minimize, mitigate, or evenremove the authorities of the federal and stategovernments, and they should seriously consider doingso. Reducing the number of governmental authoritiesexercising jurisdiction over energy development inIndian Country could only enhance the likelihood ofincreasing renewable energy and economicdevelopment efforts in Indian Country.

Pilar Thomas (Pascua Yaqui) is the deputy directorof the Office of Indian Energy Policy and Programsat the Department of Energy and assists thedirector in developing national energy policy andprograms related to Indian energy development.Formerly, she served as the deputy solicitor forIndian Affairs in the U.S. Department of the Interior.

Endnotes1 I use the term “Indian Tribe” to mean Indian tribes,nations, bands, pueblos, communities, and Alaska Nativevillages and tribes.

2 Talton v. Mayes, 163 U.S. 376 (1896); United Statesv. Lara, 541 U.S. 193 (2004).

3 Worcester v. Georgia, 31 U.S. 515 (1832).

4 Lara, 541 U.S. 193.

5 U.S. CONST. art. I, § 8.

6 U.S. CONST. art. II, § 2.


7 Treaty-making authority was “revoked” by Congressin 1871. 16 Stat. 566 (1877) (codified at 25 U.S.C. §71).

8 Talton, 163 U.S. 376 (1896). While Indian Tribes maynot be subject to the U.S. Constitution, Congress, inanother exercise of its plenary power over IndianTribes, enacted the Indian Civil Rights Act of 1968. 82Stat. 77 (1968) (codified at 25 U.S.C. § 1301 et seq.).The act requires Indian tribal governments to providecertain rights in the exercise of their functions. 25U.S.C. § 1302.

9 E.g., Trade and Intercourse Act, Act of June 30, 1834,4 Stat. 729 (codified as amended at 25 U.S.C. § 177);Executive Order of Oct. 3, 1861 (establishing UintahReserve for the Uintah Ura Indians); General AllotmentAct, 24 Stat. 388 (1877); Executive Order of July 1,1874 (establishing San Xavier Reservation for PapagoIndians); Indian Reorganization Act, 48 Stat. 984(1934); Indian Gaming Regulatory Act, 102 Stat. 2467(1988).

10 Cherokee Nation v. Georgia, 30 U.S. 1 (1831)(discussing tribes as “domestic dependent nations” andestablishing the trust relationship); United States v.Kagama, 118 U.S. 375 (1886) (tribes are subject to theplenary power and authority of the federal government);Lara, 541 U.S. 193 (tribes were not delegated criminaljurisdiction from Congress over non-member Indians,but retained inherent sovereign jurisdiction).

11 I use the term “Indian lands” to mean reservationlands, trust lands, allotments, and dependent Indiancommunities. This closely tracks the definition of“Indian Country” found in 18 U.S.C. § 1151. However,Congress has defined Indian lands in many differentways, so I do not rely on any one definition.

12 Worcester v. Georgia, 31 U.S. 515 (1832); Williams v.Lee, 358 U.S. 217 (1959); Bryan v. Itasca County, 426U.S. 373 (1976); cf. Mescalero Apache v. Jones, 411U.S. 145 (1973).

13 Williams v. Lee, 358 U.S. 217 (1959).

14 Montana v. United States, 450 U.S. 544 (1981);Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982);but see Oliphant v. Suquamish Indian Tribe, 435 U.S.191 (1978).

15 See, e.g., Indian Reorganization Act, 25 U.S.C. § 461et seq.; Indian Self-Determination and Education

Assistance Act, 25 U.S.C. § 450 et seq.; Indian MineralDevelopment Act, 25 U.S.C. § 2101 et seq.; IndianGaming Regulatory Act, 25 U.S.C. § 2701 et seq.;Indian Tribal Energy Development and Self-Determination Act (tit. V, Energy Policy Act of 2005),25 U.S.C. § 3501 et seq.

16 Oklahoma Indian Welfare Act, 49 Stat. 1967 (1936)(codified at 25 U.S.C. § 501 et seq.).

17 See THEODORE HAAS, TEN YEARS OF TRIBAL

GOVERNMENT UNDER IRA (1947) (listing 195 tribes thatorganized under the IRA, and 18 Oklahoma tribes thatorganized under the OIWA).

18 The Native American Rights Fund has an onlineresource that collects tribal constitutions and codes,http://www.narf.org/nill/triballaw/index.htm (last visited9/21/11). Other resources include Westlaw, the TribalLaw and Policy Institute, and the University ofOklahoma Native American Constitution and LawDigitization Project, http://thorpe.ou.edu (last visited 9/21/11).

19 See McClanahan v. Arizona State Tax Comm’n, 411U.S. 164 (1973); Santa Clara Pueblo v. Martinez, 436U.S. 49 (1978); Mescalero v. New Mexico, 462 U.S.324 (1983); Merrion, 455 U.S. 130 (1982).

20 Montana, 450 U.S. 544 (1981) (holding that theCrow Nation did not have regulatory jurisdiction toenforce hunting and fishing regulations over non-Indianson non-Indian fee land within the Crow Reservation).

21 Merrion v. Jicarilla Apache Tribe, 455 U.S. 130(1982); Kerr-McGee Corp. v. Navajo Tribe, 471 U.S.195 (1985); Brendale v. Confederated Tribes and Bandsof the Yakima Indian Nation, 492 U.S. 408 (1989); BigHorn Electric v. Adams, 219 F.3d 944 (9th Cir. 2000).

22 42 U.S.C. § 7601(d)(1)(B); 33 U.S.C. § 1377(e).

23 Arizona Public Service Co. v. EnvironmentalProtection Agency, 211 F.3d 1280 (D.C. Cir. 2000),cert. denied, 121 S. Ct. 1600 (2001); City ofAlbuquerque v. Browner, 97 F.3d 415 (10th Cir. 1996)(upholding Pueblo of Isleta clean water standards underthe CWA).

24 25 U.S.C. § 3504(e).

25 25 U.S.C. § 398.

26 25 U.S.C. §§ 2101–08.


27 25 U.S.C. § 415.

28 25 U.S.C. §§ 311–28.

29 16 U.S.C. § 1531 et seq.

30 42 U.S.C. § 4321; 16 U.S.C. § 470.

31 Worcester v. Georgia, 31 U.S. 515.

32 South Dakota v. Yankton Sioux Tribe, 522 U.S. 329(1998); New Mexico v. Mescalero Apache Tribe, 462U.S. 324 (1983); Washington v. Confederated Tribes ofthe Colville Indian Reservation, 447 U.S. 134 (1980).

33 Mescalero Apache, 462 U.S. 324

34 Cotton Petroleum Corporation v. New Mexico, 490U.S. 163 (1989); White Mountain Apache Tribe v.Bracker, 448 U.S. 136 (1980); Central Machinery v.Arizona State Tax Comm’n, 448 U.S. 160 (1980);Mescalero Apache Tribe v. O’Cheskey, 625 F.2d 967(10th Cir.), cert. denied, 460 U.S. 959 (1981); GilaRiver Indian Community v. Waddell, 967 F.2d 1401 (9thCir. 1992).

35McClanahan v. Arizona State Tax Comm’n, 411 U.S.164 (1973); Bryan v. Itasca County, 426 U.S. 373(1976); Montana, et al. v. Blackfeet Tribe, 471 U.S. 759(1985); cf. Oklahoma Tax Commission v. ChickasawNation, 515 U.S. 450 (1995) (allowing taxation of tribalmembers who live off the reservation).

36 Bracker, 448 U.S. 144–45.

37 Cotton Petroleum, Calpine Const. Finance Co. v.Arizona Dept. of Revenue, 211 P.3d 1228, 221 Ariz. 244(Ariz. App. 2009) (upholding property tax assessedagainst power plant located on Ft. Mojave Tribereservation); but see Crow Tribe v. Montana, 650 F.2d1104 (9th Cir. 1981) (invalidating a state excise tax oncoal mined from the Crow Reservation).

38 Pending legislation would give tribes the ability tobypass secretarial approval under the Long-TermLeasing Act as well.

39 The Tribal Law and Policy Institute collectsinformation from various sources on tribal codes andtribal courts. See http://www.tribal-institute.org/codes/overview.htm (visited 9/21/11).

40 See Crow Tribe v. Montana, 650 F.2d 1104.

CALIFORNIA DISTRICT COURT UPHOLDS THEBLM’S OCOTILLO WIND FARM APPROVALAMIDST ENVIRONMENTAL CHALLENGESJanis Bladine

In Quechan Tribe of Ft. Yuma v. U.S., __ F. Supp.2d __ (Feb. 27, 2013), the U.S. District Court inCalifornia ruled on a challenge filed by the QuechanTribe of the Fort Yuma Indian Reservation (Tribe) tothe Bureau of Land Management’s (BLM or theAgency) approval of a 10,151 acre right-of-waypermit allowing Ocotillo Express LLC to construct a112 turbine generator wind farm on federal land justoutside the small desert town of Ocotillo. The Tribe,which traces its ancestry to land within the windproject area, challenged the Agency’s approval undernumerous statutes including the National HistoricPreservation Act (NHPA), Federal Land PolicyManagement Act (FLPMA), National EnvironmentalPolicy Act (NEPA), and Archaeological ResourcesProtection Act (ARPA). Applying a “highly deferential”standard of review, District Judge Gonzalo P. Curielheld that the BLM’s approval withstood judicialscrutiny under all of the aforementioned environmentallaws, giving Ocotillo Express the green light to moveforward with the Ocotillo Wind Energy Facility.

NHPA

As described by the court, the NHPA’s section 106functions as a legal “stop, look, and listen” mandate,requiring federal agencies to consider the effects of itsproposed project. Essentially arguing that the BLMfailed to look and listen, the Tribe claimed that, prior toapproval, the BLM did not identify all historicproperties and did not consult with the Tribe asrequired by the NHPA. An examination of theadministrative record led the court to conclude that,contrary to the Tribe’s claims, the BLM adequatelydelineated its project site and correctly analyzed thewind turbines’ impacts as direct impacts. And althoughthe Tribe claimed that its monitors were not allowedaccess to direct impact survey areas, the administrativerecord indicated that tribal representatives were bothpresent and provided input during the survey.


With respect to the BLM’s NHPA obligation to consultwith the Tribe, the two sides recounted vastly divergentversions of the facts, with the tribe contending thatconsultation did not begin until three months beforeproject approval and the government claiming thatconsultation began early in the process. Again, theadministrative record supported the defendants’version of the facts, reflecting repeated agencyattempts to initiate tribal consultation beginning early inthe process. Those attempts continued until the Tribefinally acquiesced, engaging in consultation just monthsbefore completion of the project’s evaluation. Underthese facts, the court readily agreed with thedefendants, upholding their NHPA consultation efforts.

FLPMA

The Tribe alleged that the BLM failed to comply withthe FLPMA in three different ways, and in all threeways the court upheld the BLM’s actions. First, theTribe contended that the BLM’s approval significantlydiminished and degraded sensitive resources contraryto the applicable land use classification under theCalifornia Desert Conservation Area (CDCA) Plan, aplan created pursuant to the FLPMA. After reviewingthe record, the court concluded that the Tribe failed todemonstrate that the wind farm, as modified during theevaluation process with numerous mitigation measures,was contrary to the applicable land use classificationrequirements of the CDCA Plan.

Second, the Tribe contended that the BLM’s decisionwas arbitrary because the agency downgraded theproject’s visual resource management category justprior to the Final Environmental Impact Statement(FEIS). In rejecting the Tribe’s contention that such anaction was arbitrary, the court relied upon a similarchange in Southern Utah Wilderness Alliance, 144IBLA 70 (1998), an action that was upheld. Finally,the court examined whether the BLM decision was anunnecessary and undue degradation of public lands.Commenting that the agency was entitled to “a greatdeal of discretion,” the court examined the Record ofDecision (ROD) discussion and numerous mandatedmitigation measures and concluded that the BLM’sdetermination of no unnecessary and unduedegradation of public lands was reasonable.

NEPA

The court upheld the BLM’s NEPA analysis containedwithin its FEIS against the Tribe’s challenges that (1) asingle EIS should have been used to analyze theagency’s “priority” renewable energy projects; and (2)a “hard look” was not taken at the project’s cumulativeeffects with past, present, and future actions, with itsindirect growth-inducing effects, and with local lawconformance.

Connected, cumulative, or similar actions must beanalyzed in a single EIS. The Tribe alleged that theBLM planned more than a dozen “priority” renewableenergy projects for about 25 million acres of landwithin the CDCA, all of which should have beenanalyzed in a single EIS. But it failed to convince thecourt that the projects were connected, cumulative, orsimilar actions.

With respect to whether the BLM took the requisite“hard look” at the project’s environmental impacts, theTribe argued that the agency failed to analyze theproject’s cumulative effects with past, present, andfuture actions, its indirect growth-inducing effects, andthe project’s compliance with local law. Whileexamining the analyses completed for the project’scumulative impacts, the court explained that the agencymust not simply list out related projects but must alsoenumerate their environmental effects and the impactsas they interact with one another. With respect to boththe wildlife and cultural resources impacts analyses, theBLM analyzed each resource separately, specificallyaddressed the cumulative impacts, listed the currentand reasonably foreseeable future projects, andincluded a quantitative or otherwise detailed analysis ofcumulative impacts.

Finally, the Tribe claimed that the BLM failed toconsider the project’s indirect growth-inducing effects,specifically arguing that the project would act as acatalyst for additional adjacent wind and energydevelopments. According to the court, however, theTribe failed to provide any evidence disputing theagency’s analysis contained within the BLM’s growth-inducing impacts discussion. Similarly, with respect tothe BLM’s conformity with local law discussion, the


court concluded that the Tribe failed to offer anyevidence contradicting the agency’s conclusion thatthere was no local law conflict.

ARPA

Although the tribe contended that the BLM failed toissue an ARPA-compliant permit for artifact excavationand removal, the Tribe failed to respond to therecitation in the record that indeed a permit was issuedto the contractor prior to excavation and removal. Forthis reason, the court upheld the BLM’s actions underARPA.

Janis Bladine practices environmental law as apartner with the Phoenix, Arizona, firm of Jennings,Haug & Cunningham.

FREE PRIOR INFORMED CONSENT:LIMITATIONS AND SUCCESSES IN ENABLINGNATIVE DIRECTION OF NATIVE LANDDEVELOPMENTSamantha Arens

Free prior informed consent (FPIC) is a concept thathas recently generated significant attention amongindigenous, international, academic, and corporategroups. It has been used frequently in the internationalcontext as a protective mechanism for the rights ofnative people. Implementation of FPIC to the end ofincreasing the ability of native peoples to self-directdevelopment of their lands has met with varyingdegrees of success worldwide. This article examinesways in which FPIC can be leveraged in domesticcontracting contexts (such as energy development inthe American Southwest) to give maximum power tonative people.

A. Legal Background

1. Origins of FPICFPIC originated as a way to address the oft-occurringproblem of indigenous peoples being cut out ofplanning and decision making in projects involvingnatural resources, such as mineral extraction, damconstruction, and logging. Issues, such as whorepresents and may speak or sign for a group ofpeople, and what happens when a project exceeds theunderstood scope, have frequently been resolved inways that harm native people.

Recognizing these problems, international organizationsdeveloped FPIC as a way to increase transparency,solicit community input prior to project implementation,and require ongoing community consent as a projectunfolds. See Brant M. McGee, The CommunityReferendum: Participatory Democracy and theRight to Free, Prior, and Informed Consent toDevelopment, 27 BERKELEY J. INT’L L. 570, 576–80(2009) (describing origins of FPIC).

2. Lack of Substantive Federal Support forFPICThe United Nations Declaration on the Rights ofIndigenous People (UNDRIP) codifies key concepts

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of FPIC. G.A. Res. 295, U.N. GAOR, 61st Sess.(Sept. 7, 2007). In 2010, President Obamaannounced U.S. support for UNDRIP. See UnitedStates Endorses International Declaration onIndigenous Rights, http://www.aclu.org/human-rights/united-states-endorses-international-declaration-indigenous-rights (last visited May 27, 2013).Unfortunately, the Department of State’s policystatement on UNDRIP picks and chooses which ofUNDRIP’s terms are incorporated into U.S. law. Forinstance, the Department of State interprets FPIC asrequiring “consultation with tribal leaders, but notnecessarily the agreement of those leaders, before theactions addressed in those consultations are taken.”ANNOUNCEMENT OF U.S. SUPPORT FOR THE UNITED

NATIONS DECLARATION ON THE RIGHTS OF INDIGENOUS

PEOPLES, http://www.state.gov/documents/organization/184099.pdf (last visited May 27, 2013). Agreement, inthe form of consent that can be withdrawn, is requisiteto FPIC as described by UNDRIP. G.A. Res. 295,supra.

Executive Order 13175 of November 6, 2000,provides some measure of input by native groups indeveloping federal policy, and mandates that federalagencies consult with tribes in developing policy thatcould impact native people. Exec. Order No. 13175,65 Fed. Reg. 67,249 (Nov. 6, 2000). Like the 2010federal policy, this order indicates a federal movetoward recognizing FPIC, but falls short of givingFPIC the full force intended by UNDRIP.

B. Elements of FPIC

1. Incorporate FPIC into Contract Languageat or Before Explorative StagesBecause there is not strong federal policy in support ofthe core concepts of FPIC, native communities mustnegotiate for its core principles, outlined below, to beincluded in contract language.

The essence of the “prior” element of FPIC is to seeklocal consent at an early stage, before work on aproject has begun. Since there are mandatoryconsultation requirements under federal law prior toproject implementation, such consultation could be anopportunity to explain the benefits of FPIC to project

developers and negotiate incorporation of otheraspects of FPIC into contract terms.

In international contexts, FPIC has been sought asearly as the explorative stages of project development.For example, Shell sought community approval at theexploration stage of a project on the Camisea oil andgas fields in Peru. THE CAMISEA GAS PROJECT: AMULTI-STAKEHOLDER PERSPECTIVE ON CONFLICTS &NEGOTIATION, http://crgp.stanford.edu/publications/working_papers/vences.pdf (last visitedMay 27, 2013). One trigger for Shell’s willingness toseek community approval may have been publicopposition at an early stage of the project; the projectaffects remote tribes in the Amazon. Althoughorganizing efforts can take time, early and well-publicized protests can serve as leverage in negotiation.The end result of discussions between Shell and thePeruvian community was a compromise to usehelicopters and rivers for ingress and egress to theproject, rather than building access roads throughvillage land. IMPLEMENTING A CORPORATE FREE, PRIOR,AND INFORMED CONSENT POLICY: BENEFITS AND

CHALLENGES, http://www.foleyhoag.com/publications/ebooks-and-white-papers/2010/may/implementing-a-corporate-free-prior-and-informed-consent-policy, at 31 (last visited May 27,2013). While the Camisea project is far from a successstory, the point illustrated is that major corporationshave shown willingness to engage in communityconsultation early on in project development. At thepoint discussions begin, so must negotiation for keyterms.

In contrast to the Camisea example, Manhattan Miningobtained government approval but not communityconsent to go forward with the Tambogrande mineproject in Peru. Because of failure to obtain communityconsent, work had to be halted completely whencommunity opposition arose. This demonstrates that, incertain instances, corporations can be incentivized toobtain consent early to ensure smooth operations goingforward. IMPLEMENTING A CORPORATE FREE, PRIOR,AND INFORMED CONSENT POLICY: BENEFITS AND

CHALLENGES, supra, at 30.


Finally, one method of gaining early approval (or veto)of a project is by holding public referendum. In Peru,Argentina, Mexico, and Guatemala, local communitieshave held elections to ask voters whether a projectshould go forward. McGee, supra, at 573. Thisstrategy has been used by the Navajo Nation in thecontext of water rights. Statement by the NavajoNation Human Rights Commission Executive Director,http://www.navajo-nsn.gov/News%20Releases/NNHRC/2012/Apr12/41712_StatementByTheNavajoNationHumanRightsCommissionExecutiveDirector.pdf (last visited May 27, 2013).

2. Local People Have Absolute Veto Powerover a ProjectThe “consent” aspect of FPIC connotes more thansimple acquiescence. It describes the idea that, at anystage of a project, consent can be revoked such thatthe project must be redesigned or work must stop.Where law does not support FPIC, as in the UnitedStates, this is likely the most difficult, and important,term to be included in a contract between a developerand a tribe. However, looking again to internationalcontexts, inclusion of such a term in a contract is notunprecedented.

For example, in Canada, a model agreement betweenVoisey Bay Nickel Company and the Innu Nation/Labrador Inuit Association gave veto power to nativepeople, in addition to involving them in project design,environmental protection, and all project phases. FREE,PRIOR, AND INFORMED CONSENT IN REDD+, http://www.recoftc.org/site/uploads/content/pdf/FPICinREDDManual_127.pdf (last visited May 27,2013).

3. Consent Must Be Broad BasedIdeally, FPIC addresses the issue of who representslocal people. As an example, to return to the Camiseamine example in Peru, Shell engaged with local leaders,but other members of the community voiced oppositionto the project when the alleged leaders did not shareinformation with them. Shell responded by seeking landaccess through multiple large-scale communityassemblies. See IMPLEMENTING A CORPORATE FREE,PRIOR, AND INFORMED CONSENT POLICY: BENEFITS AND

CHALLENGES, supra, at 42.

C. Mechanisms for Adoption of FPIC

1. Inclusion as a Prior Condition forFinancing and Regulatory DecisionsMajor financers are aware of and have, to a limitedextent, adopted some of the principles of FPIC in theirguidelines. For example, the World Bank has adoptedFPIC as a requirement for financing private sectorprojects such as dams and extraction. Aid GroupLauds New World Bank Policies on Indigenous Rightsand Oil and Mining Transparency, http://www.oxfamamerica.org/press/pressreleases/aid-group-lauds-new-world-bank-policies-on-indigenous-rights-and-oil-and-mining-transparency (last visitedMay 17, 2013).

2. Shareholder PressureIn 2010, Canadian oil giant Talisman Energy’s board ofdirectors approved FPIC principles as part of a newcommunity-relations policy. The policy explicitlydefines standards for engagement with indigenous andtribal communities in Talisman’s project areas. SAFE

PROFITABLE GROWTH: 2010 CORPORATE

RESPONSIBILITY REPORT, http://cr.talisman-energy.com/2010/communities/ (last visited May 27, 2013); seealso 2009 CORPORATE RESPONSIBILITY REPORT: SAFE,PROFITABLE GROWTH, http://cr.talisman-energy.com/2009/community-relations.html (last visited May 27,2013) (discussing shareholder involvement in decisionto investigate FPIC as a corporate policy). A majorfactor in bringing about the board decision waspressure from large shareholders and, possibly, adesire to revamp Talisman’s image after involvement inconflict in the Sudan.

3. Minimize Potential for Future LegalAction and Maximize Potential for SmoothOperationsInclusion of affected peoples in planning anddevelopment will lower long-term legal risk byreducing the likelihood of future opposition. In manyinstances, reengineering problematic projects withmutually satisfactory, innovative solutions can avoidfuture negative publicity and delayed operations.

Some major mining entities see cost advantages infollowing Talisman’s example. Most recently, in May


2013 the International Council on Mining and Metals(ICMM) released a position statement adopting certainelements of FPIC as binding on its member companies(including such major players in the extractiveindustries as Rio Tinto and, pertinent to U.S.operations, Newmont; Barrick Gold Corporation;BHP Billiton; and Freeport-McMoran Copper &Gold, among others). INTERNATIONAL COUNCIL ON

MINING AND METALS: POSITION STATEMENTS, http://www.icmm.com/our-work/sustainable-development-framework/position-statements (last visited May 28,2013). Although the ICMM position statementcontains some clauses that are unsupportive of FPIC,such as a prohibition on veto power, the general toneand substance support implementation of meaningfulFPIC.

Samantha Arens practices real estate litigationwith Churchwell White in Sacramento, California,and has previously worked with DNA People’sLegal Services in Window Rock, Arizona.

THE SUPREME COURT DENIES REVIEW OFKIVALINA GLOBAL WARMING DAMAGESCLAIMRonnie P. Hawks

In American Elec. Power Co. v. Conn., the SupremeCourt held that federal common law nuisance claimsseeking abatement of greenhouse gas emissions hadbeen displaced by the comprehensive legislativescheme of the Clean Air Act. __ U.S. __, 131 S. Ct.2527 (2011). American Elec. did not, however,address the issue of whether the CAA also displacedfederal common law claims for damages arising fromair pollution. That issue now appears to have beenaddressed in a suit brought by a Native Alaskan tribefor damages allegedly arising from global warming.

The Native Village of Kivalina, a federally recognizedtribe of Inupiat Native Alaskans, and the City ofKivalina are located on a coastal barrier reef innorthwest Alaska. Residents depend upon sea ice to

shield them from fierce winter storms, but in recentdecades the ice has been thinner and shorter-lived. Asa result, waves and storm surges have seriouslydamaged the reef to the point that the village’s buildingsand infrastructure are now threatened. Unless thevillage relocates to more sheltered grounds, it maysoon cease to exist. Native Vill. of Kivalina v.ExxonMobil Corp., 696 F.3d 849, 853 (2012).

The Army Corps of Engineers has named Kivalina as a“Priority Action Community” in a 2009 study ofAlaskan communities facing severe erosion. Amongother things, additional shoreline protections, a newevacuation and access road, and relocation of theschool have been proposed, at total costs in themillions of dollars. Eventually, the village hopes torelocate to the mainland. A 2006 report cited by theCorps estimated that relocation would cost between$95 million and $125 million. More recent estimateshave been as high as $400 million. See U.S. ArmyCorps of Engineers, STUDY FINDINGS AND TECHNICAL

REPORT, ALASKA BASELINE EROSION ASSESSMENT (Mar.2009), available at https://docs.google.com/viewer?url=http%3A%2F%2 Fwww.climatechange.alaska.gov%2Fdocs%2Fiaw_USACE_erosion_rpt.pdf(last visited May 23, 2013); Carey Restino, ALASKA

DISPATCH, Threatened Alaska Village of KivalinaMay Get Needed Evacuation Route (Apr. 6, 2013),available at http://www.alaskadispatch.com/article/20130406/threatened-alaska-village-kivalina-may-get-needed-evacuation-route (last visited May 23, 2013).

Ironically, the village originally was located on themainland. The barrier island where the village currentlylies was a traditional hunting ground and seasonalresidence, but the tribe moved inland during the fall andwinter. In 1905, the Bureau of Indian Affairs mistook asummer camp on the barrier reef as the tribe’s year-round village. It built a school on the reef and orderedthat all children be enrolled in the school under threatof imprisonment. This compelled tribal members tomove to the reef. During the resulting migration, 70percent of the original Kivalina’s residents fell victim todisease and starvation. NANA Regional Corp., Inc.,Kivalina Village Profile, available at http://nana.com/regional/about-us/overview-of-region/kivalina/ (last visited May 23, 2013).


In 2008, the tribe and city sued numerous energy, oil,and utility companies, primarily under the federal, state,and common law theories of public nuisance. Theplaintiffs argued that global warming was hinderingproduction of protective sea ice and generating risingsea levels. Among other things, the plaintiffs arguedthat, as substantial contributors to global warming, thedefendant companies were creating a public nuisanceand were interfering with public rights, including publicand private property rights. The plaintiffs requestedmonetary damages, including a declaratory judgmentfor future monetary damages and expenses. NativeVill. of Kivalina v. ExxonMobil Corp., Complaint forDamages, at 67 (N.D. Cal. Feb. 26, 2008), availableat http://www.adn.com/static/adn/pdfs/Kivalina%20Complaint%20-%20Final.pdf (last visitedMay 23, 2013).

The district court dismissed the federal public nuisanceclaim as barred by the political question doctrine. Thecourt also held that the plaintiffs lacked standingbecause they could not demonstrate the causationelement of nuisance. Native Vill. of Kivalina v.ExxonMobil Corp., 663 F. Supp. 2d 863 (N.D. Cal.2009).

On appeal, the Ninth Circuit did not address thepolitical question doctrine or standing. Instead, theNinth Circuit started with the question of whetherplaintiffs could bring a nuisance claim under federalcommon law. The court recognized that a publicnuisance suit based on ambient or transboundary airpollution could be brought under federal common law.But the right to assert a federal common law publicnuisance claim is barred where a statute directlyaddresses the question at issue. Relying on AmericanElec. Power Co. v. Conn., __ U.S. __, 131 S. Ct.2527 (2011), the Ninth Circuit held that Congressalready had addressed the issue of greenhouse gasemissions in the Clean Air Act, thereby displacingfederal common law on the issue. Although the plaintiffin Kivalina sought damages—instead of abatement ofemissions as in American Elec.—the court held that allremedies are barred where a common law cause ofaction is displaced by statute. Kivalina, 696 F.3d at855–58.

In a concurring opinion, Judge Pro agreed with thedistrict court that the plaintiffs had not establishedstanding. Noting that plaintiffs had admitted that globalwarming had been occurring for centuries and was theresult of worldwide emissions from a multitude ofsources, Judge Pro concluded that the plaintiffs hadfailed to identify when their injuries occurred in relationto the defendants’ activities and had not tied theirinjuries to those activities. Id. at 867–69. Judge Probelieved that it would be unfair “to hold that a privateparty has standing to pick and choose amongst all thegreenhouse gas emitters throughout history to holdliable for millions of dollars in damages.” Id. at 869.

The Supreme Court recently rejected the Kivalinaplaintiffs’ petition for certiorari. Native Village ofKivalina v. ExxonMobil Corp., No. 12-1072(petition denied May 20, 2013). This appears to lie torest the issue of whether damage claims under federalcommon law are available for injuries arising from airpollution. As the Ninth Circuit lamented, this outcome“obviously does not aid Kivalina, which itself is beingdisplaced by the rising sea. But the solution toKivalina’s dire circumstance must rest in the hands ofthe legislative and executive branches of ourgovernment, not the federal common law.”

Ronnie P. Hawks is a partner at Jennings, Haug &Cunningham, L.L.P., in Phoenix, Arizona. Herepresents businesses, individuals, and governmententities on environmental, natural resources, andtribal law matters.

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